The Auditor General has found that Murray McCully (and the rest of his National Party cabinet colleagues) are not corrupt criminals. They just entered into a deal with a Saudi businessman without really knowing why, what that deal would do, or the basis for giving him some $11 million or our money. 

The Auditor-General's report on Murray McCully's "sheep-to-sand" deal (or, rather, her "Inquiry into the Saudi Arabia Food Security Partnership") is hot off the press. Immediate thoughts:

First, here are the lines from it that you will hear over and over again from John Key and the rest of the National caucus:

"I found no evidence that the arrangements entered into as part of the Saudi Arabia Food Security Partnership were corrupt. ... The payments did not amount to bribery or facilitation payments. Instead, they were made as part of a legally valid contract for services. Public money was spent within the necessary financial approvals."

So, there's nothing really to see here, is there? It's just some innovative policy making designed to maximise the exposure of New Zealand's farming expertise in a region important to future export growth, whilst helping to remove a potential obstacle to New Zealand cementing a free trade agreement with that region that will lead to even more exports. New Zealand Inc, for the win!

Second, here are the lines from it that you will hear over and over again from opposition MPs:

That said, I share many New Zealanders' concerns about the arrangements. I found significant shortcomings in the paper put to Cabinet in support of the decision to enter into the Saudi Arabia Food Security Partnership. The contract's benefits to New Zealand were unclear in the Cabinet paper, the business case, and its subsequent implementation.

It is not clear on what basis the amounts paid to the Saudi Arabian investor's company under the contract were arrived at. A key objective of the Saudi Arabia Food Security Partnership was to remove a perceived obstacle to a free trade agreement with the Gulf Cooperation Council. That agreement remains unsigned, although in two recent joint statements (in April and September 2016) New Zealand and Saudi Arabia have indicated progress, including towards completion of the free trade agreement.

In my view, settlement of a grievance was provided under the guise of a contract for services. The Saudi Arabia Food Security Partnership was the result of a need to resolve a diplomatic issue and, in the view of Ministers, to settle a Saudi Arabian investor's grievance. The situation was complicated by views about live sheep exports. The contract does not outline those different policy objectives or the complexities. Importantly, the contract does not specifically reflect the settlement component relating to the grievance.

In other words, while the deal may have been not illegal and involved some sort of contract for something, the reason for entering into it and committing some $11.5 million of public money was not clear either at the time or now, the deal does not do what it said it was meant to do (remove the Government's risk of getting sued) and there's no way of knowing if it actually makes any sort of financial sense. 

Third, while in any sane system of political accountability the Minister who put this deal together and sold it to his cabinet colleagues would be required to offer up his head on a plate, Murray McCully likely will ride this out. That's so for three reasons. John Key is in his third term, and the lustre has long since gone from that bright and shiny early commitment to "expect high standards from my ministers. If they don't meet the standards I set, then obviously I will take action if necessary." There's no previous "corrupt" long-term Labour Government for him to contrast himself with now. Instead, Key is deep into the hard grind of governance, where Ministers will cock up and the opposition will seek heads and if he gives it to them it's his administration that starts to look tired and shabby. So until someone reaches Judith-Collins-at-Orivida levels of embarrassingness, they can expect to stay in their jobs.

Further, Key really can't give McCully up now because he's already essentially forgiven him for the things that the Auditor General's report sets out. We already knew that - despite what McCully told Cabinet - there was no real legal threat from the Saudi businessman that justified doing a deal with him. We already knew that the figures being promised to that businessman were effectively plucked from thin air. We already knew that the deal only made any sense as an attempt to buy a free trade deal. And yet Key had all down the line said that he was happy with what McCully had put together and Cabinet was collectively supportive of it. So if he were to turn around now and sack McCully, the immediate question would be why did you wait so long?

And last, this actually looks like the sort of deal that Key might well put together himself. Remember Sky City and the Auckland Convention Centre? Remember The Hobbit and Warner Bros? So I don't think Key really would regard the process failures pointed to by the Auditor General as being all that important. What matters is getting the job done - and it looks like New Zealand may be inching towards a trade deal with Saudi Arabia and the rest of the Gulf States. So ... who really cares about how we got there?

Which is a little bit depressing, really. Because I'd like to think that when one of the public's most important watchdogs barks so loudly, something should happen as a result.

Comments (3)

by Muz on November 02, 2016
Muz

The really depressing thing about this in my mind, is that they'll continue to operate in such a fashion until NZ gets a viable opposition.

by Ewan Morris on November 02, 2016
Ewan Morris

here are the lines from it that you will hear over and over again from John Key and the rest of the National caucus

And from Murray McCully's press agent at the New Zealand Herald, Audrey Young, who writes that 'McCully has won'. Because it's all about the winning, not about good decision-making...

by Keith Ng on November 03, 2016
Keith Ng

Can you clarify something for me? I don't understand how it can be a "settlement of a grievance was provided under the guise of a contract for services... to remove a perceived obstacle to a free trade agreement", but not a "facilitation payment".

Is "payment" the key word here? If it was cash instead of a "contract for service", would it be clear cut corruption? I really don't understand the argument at work here.

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